Cloud in the silver lining

Cloud behemoth Amazon Web Services (AWS) is on a spin with newly-minted offerings that flank the Cloud core well

Revenue

Rs 89,560 mn

When you are battling with big rivals and equally-big Cloud outage impacts, it becomes crucial to find a strong pivot. And Cloud behemoth Amazon Web Services (AWS) is on that spin – pretty much this year. Specially with de-risking efforts to new regions that flank its main AZs and newly-minted offerings that flank the Cloud core well.

Just a few months back, in July 2022, AWS experienced a power failure that disrupted services located within Availability Zone 1 (AZ1) in the US-EAST-2 Region. Reportedly, this outage affected connectivity to and from the region and brought down Amazon’s EC2 instances, causing some dominoes to topple in applications such as Webex, Okta, Splunk, BambooHR, and others. The power outage lasted approximately 20 minutes, and some of its customers’ services and applications took a recovery time of up to three hours.

Reminds you of December 2021, when there was an extended outage in its Eastern U.S. cloud region, when AWS stated it was “pursuing multiple mitigation paths in parallel” and when AWS services, like EC2, Connect, DynamoDB, Glue, Athena, Timestream and Chime, were affected.

Turns out that building in physical redundancy is as important as injecting business redundancy when you achieve a scale and Cloud grip like that of AWS. Such ‘big basket’ strategies help to diversify risks and erase the ‘one trick pony’ dangers, if any.

Taking a glance at some latest numbers and announcements from AWS show that this is exactly what the Cloud major has been up to recently.

“Analysts, from other firms, also argue that AWS is a 19.7 billion a quarter business, with an $80 billion run rate. They have underlined that it has strong growth rate amidst a lot of skepticism for Cloud.”

In its financial results announced for its third quarter ended September 30, 2022, Amazon shared that AWS segment sales increased 27 per cent year-over-year to $20.5 billion. As per some analysts, this could be a slow expansion rate. When compared to the second quarter, this figure takes a new hue.

AWS also reported revenue of $19.74 billion in the second quarter, a 33 per cent increase year-over-year (which, interestingly, analysts compared to a 37 per cent growth rate reported in the first quarter. Data from Synergy Research Group, about Q2 enterprise spending on Cloud infrastructure, pointed that Amazon’s worldwide market share increased to almost 34 per cent. Also, AWS, Microsoft Azure and Google Cloud grabbed a combined 65 per cent of the worldwide cloud market (up from 61 per cent in 2Q 2021).

The research group augured that while global cloud providers are not immune from the impact of ongoing shifts in exchange rates, there is an impressive rate expected in underlying growth in cloud usage. It’s been leading to a clear acceleration in both the launch of new hyperscale data centers and the level of spending on data center hardware and software. Its forecasts pointed to a continued strong growth in all key cloud market metrics

Analysts, from other firms, also argue that AWS is a 19.7 billion a quarter business, with an $80 billion run rate. They have underlined that it has strong growth rate amidst a lot of skepticism for Cloud. Some industry watchers have even stated that from a horizontal and vertical cloud point of view, it is slowly becoming a two horse race between AWS and Azure.

This is an interesting time to be in the Cloud business, for sure. On one hand businesses are opening their wallets for digital transformation like never before. And on the other hand, there are doubts on areas like outages, Cloud vulnerabilities and repatriation.

As we can see in the tables below, AWS seems to be making sure that it has enough footprint on availability zones and enough breadth of solutions to capture every Cloud-adjacent area. The new AWS Asia Pacific (Bangkok) Region will consist of three Availability Zones, adding to the existing 87 Availability Zones across 27 geographic regions. AWS is adding Availability Zones across eight more AWS Regions in Australia, Canada, India, Israel, New Zealand, Spain, Switzerland, and Thailand.

It has envisaged an estimated investment of more than $5 billion (190 billion baht) in Thailand over 15 years. It also planned the launch of its second Region in the Middle East. As shared in the announcement, the AWS Middle East (UAE) Region was slated to invest an estimated $5 billion (AED 20 billion) in the UAE over the next 15 years through the new AWS Middle East (UAE) Region.

If it can keep hammering those nails well, then it can weather a lot of storms – without any lights-out fears, literally and metaphorically.

With all these plugs in place, AWS can continue to stay out of outages and also grab an out-of-the-box spot in the Cloud market.

Key Wins

•             Announced new commitments and migrations from BMW Group, grocery delivery service Schwan’s Home Delivery, online grocery platform Pick n Pay, and South Korea-based wireless telecommunications operator SK Telecom (SKT). Also selected as Cloud provider by Pick n Pay, UK’s Telco firm BT, Health and wellness organization Geisinger, Investment banking firm Jefferies, and Delta Air

•             Continued to expand AWS’s infrastructure footprint with plans to launch the AWS Asia Pacific (Bangkok) Region in Thailand and opening the second Region in the Middle East, the AWS Middle East (UAE) Region

•             Saw notable customer momentum, with new commitments and migrations from customers like T-Systems, Telefonica, Commnet Broadband, Etisalat UAE

•             Mahindra also selected AWS to power an automation platform designed to accelerate the adoption and deployment of 5G networks by telecommunications carriers

•             In Sports too, AWS has been scoring well with work from German national football league Bundesliga, the National Hockey League (NHL), Maple Leaf Sports and Entertainment

Key Partnerships

•             With CrowdStrike for end-to-end comprehensive protection

•             With SK Telecom for Computer Vision AI Services

•             With IBM, Splunk and MongoDB as deepening of partnerships

•             With Boeing for transforming Aerospace Design and Manufacturing

•             An alliance and investment with Harvard University to advance fundamental research and innovation in quantum networking

•             Announced the AWS Generation Q Fund at the Harvard Quantum Initiative to train the next-generation of quantum scientists and engineers

Puneet Chandok

President, AWS India

By Pratima H

pratimah@cybermedia.co.in